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Best electric cars under £40,000 to avoid the luxury car tax

EVs will no longer be exempt from the VED luxury car surcharge from April 2025 – avoid the fee with one of these cars

Best electric cars under 40k

An overhaul of the UK’s Vehicle Excise Duty (VED) system, otherwise known as road tax, is coming in April 2025, and some big changes are in store for electric car buyers.

For starters, electric cars will have to pay the same flat annual VED rate as new petrol and diesel cars at £195 per year, following a £10 VED fee in the first year. But more importantly, electric cars will lose their exemption from the ‘Expensive Car Supplement’ that applies to any new car costing £40,000 or more.

Cheapest electric carsThe 10 cheapest electric cars you can buy today

That’s a big deal because the Expensive Car Supplement, commonly referred to as the ‘luxury car tax’, costs a whopping £425 a year from years two through to six of ownership – that’s an additional £2,125 to factor into your running costs. For car buyers, the problem lies in that many electric cars are more expensive than their petrol or diesel counterparts, with a large proportion costing over that £40,000 threshold.

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But fear not – if you’re looking to make the switch to an electric car and don’t fancy handing over all of that extra cash, there are plenty of great electric cars that will cost you less than £40,000, sparing you from the Expensive Car Supplement.

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We’ve rounded up our favourites on this list, covering a wide range of bodystyles to appeal to as many car buyers as possible. All cost under £40,000 in their most basic form, but beware, springing for a higher trim level or ticking a few option boxes could push the price beyond the limit. We’ll let you know if that’s the case below.

On the other hand, there are plenty of electric cars on sale today that fall well below that £40,000 value – sometimes less than half. We have a full list of the most affordable electric cars if you’re looking for the lowest barrier to entry, while our list of the best electric SUVs will appeal to buyers wanting a bit more space.

Best electric cars under £40,000

For now, here are the best electric cars you can buy today for under £40,000…

Renault Scenic review – family-friendly electric SUV with impressive range

Renault Scenic Carbuyer UK drive
Carbuyer rating

4.4 out of 5

Read full review
  • Priced from around £37,000

The Renault Scenic is our reigning Best Electric Family Car for 2025, so it’s a pleasant surprise to learn that it costs comfortably under £40,000. That’s less than many of its electric SUV rivals, yet the Scenic outperforms them in key areas, including range, comfort, practicality and – in our opinion at least – style.

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The Scenic lineup starts from around £37,000, but you won’t be able to upgrade to one of the higher trim levels without straying over the £40,000 limit unfortunately. Still, even the base ‘Techno’ car comes with loads of kit, including a 12-inch infotainment screen, LED headlights, a rear-view camera and 19-inch alloy wheels.

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You’re also limited to the smaller battery and motor combination. This ‘Comfort Range’ model pairs a 60kWh battery with a 168bhp front-mounted electric motor for a maximum range of 261 miles. That’s not groundbreaking in this day and age, but it will still be plenty for buyers who mainly stick to urban driving. Go further afield, and you can always use a public rapid charger for a speedy 15 to 80% top up in just over 30 minutes.

ProsCons
  • Impressive range
  • Excellent infotainment
  • Lots of room
  • So-so acceleration
  • Awkward loading lip
  • Poor Renault Driver Power result

Find the latest new and used Renault Scenic deals on our sister site Auto Express

Citroen e-C3 review – the right car at the right time

Citroen e-C3 front quarter cruising
Carbuyer rating

4.2 out of 5

Read full review
  • Priced from around £22,000

Only looking for an urban runaround? There are plenty of small electric cars these days that cost well under £40,000, but we think the Citroen e-C3 is the best of the lot. For just £22,000 you can get behind the wheel of one of the most practical and comfortable superminis on the market, while enjoying the benefits of low EV running costs. Sure, the petrol model is cheaper still, but we think the smooth, nippy electric powertrain suits this supermini to a tee.

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Sit inside the e-C3 and it’s clear that some cost-cutting has taken place in order to hit that affordable starting price, but the essentials are all here. You get a 10.25-inch infotainment screen with Apple CarPlay and Android Auto connectivity, while the higher-spec Plus model gets niceties like heated seats, a heated steering wheel and a reversing camera. Importantly, interior space is great, with roomy rear seats that can actually be used by adults. Even the boot space is pretty good.

ProsCons
  • Very affordable
  • Lots of rear passenger space
  • Comfortable
  • Cheap, harsh interior plastics
  • Slow
  • Mediocre boot space

Find the latest new and used Citroen e-C3 deals on our sister site Auto Express

Skoda Enyaq review – a spacious, fool-proof electric SUV

Skoda Enyaq iV SUV - front 3/4 dynamic
Carbuyer rating

4.5 out of 5

Read full reviewWatch video
  • Priced from around £39,000
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The Skoda Enyaq has been an electric family SUV favourite of ours since it arrived in 2021, and it still holds its own today. It’s crept up in price over the years, with the 2025 facelift seeing the cheapest model rise to £39,000, but that’s still low enough to just sneak under the Expensive Car Supplement limit. 

A rival to the Scenic above, the Enyaq has a few things going in its favour. It’s the more practical of the two SUVs, with a bigger boot and more cabin space for rear-seat passengers. The base model’s 59kWh battery delivers essentially the same range as the Scenic, but be warned that you’ll need to fork out an extra £1,100 for an efficiency-boosting heat pump, pushing the price over the £40,000 limit. It’s a helpful piece of tech that improves range in cold conditions and comes fitted to the Scenic as standard.

ProsCons
  • Versatile interior
  • Good value
  • Spacious
  • Firm ride
  • Fastest charging adds cost
  • Cold weather significantly affects range

Find the latest new and used Skoda Enyaq deals on our sister site Auto Express

Hyundai Kona Electric review – more refined, spacious and upmarket than before

Hyundai Kona Electric N Line
Carbuyer rating

4.5 out of 5

Read full review
  • Priced from around £35,000
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If you’re after a small electric SUV, then you could do a lot worse than the Hyundai Kona Electric. Its sci-fi styling hides an excellent electric powertrain, a decent range and respectable performance, while the interior is a real highlight – it strikes a well-judged balance between flashy tech and functional buttons, while material quality is leagues ahead of the old car. It gets a bigger boot than its rivals and the rear seats can comfortably seat two adults. It’s a genuinely usable small car.

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Your £35,000 gets you behind the wheel of the entry-level ‘Advance’ model, but we think there’s little need to upgrade to a higher trim level. You get all the kit you could need in this model, including front and rear parking sensors, a pair of 12.3-inch displays and a heat pump. For around £3,500 extra, you can swap the standard 48kWh battery for the ‘Long Range’ 65kWh unit. The total cost still falls under the £40,000 threshold and you’ll get a much more usable 319 miles of range versus 234 miles. It’s a worthwhile upgrade if you plan to regularly use your EV for longer journeys.

ProsCons
  • Improved practicality
  • Upmarket interior
  • Solid EV powertrains
  • Mediocre charging speeds
  • Conservative interior styling
  • Unexciting to drive

Find the latest new and used Hyundai Kona Electric deals on our sister site Auto Express

Kia EV3 review – small electric SUV hits the right notes

Kia EV3 front quarter driving
Carbuyer rating

4.5 out of 5

Read full review
  • Priced from around £33,000
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Kia was already off to a great start with its range of electric ‘EV’ models, including the sleek EV6 and the enormous EV9. But a small electric SUV has recently joined the ranks, offering a similar electric driving experience for well under the luxury car tax limit. The Kia EV3 is one of our favourite small electric SUVs, and while it’s not as spacious or premium as those large EVs, it will tick nearly every box for those wanting an urban electric runaround.

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The Kia EV3’s starting price of £33,000 is pretty remarkable when you consider what you get. The interior has plenty of tech, including a pair of crisp 12.3-inch screens, plus a reversing camera and heated front seats. The standard battery is on the smaller side at 52kWh, but range is still a very usable 270 miles. However, for an extra £3,000, you can upgrade to the 81kWh battery, increasing range to a mighty 375 miles. That gives the EV3 some serious long-distance credentials, while still sitting comfortably under £40,000.

ProsCons
  • Solid range figures
  • Roomy, tech-filled cabin
  • Easy to live with
  • Not very sharp to drive
  • Just one trim level for the 58kWh battery
  • Some hard plastics inside

Find the latest new and used Kia EV3 deals on our sister site Auto

Hyundai Ioniq 5 review – cutting-edge EV with retro looks is now even better

Hyundai Ioniq 5
Carbuyer rating

4.5 out of 5

Read full review
  • Priced from around £40,000

Go for the entry-level Hyundai Ioniq 5 and you’ll only see £100 change from your £40,000, but that’s still enough to land it a place on this list. Since its introduction in 2021, the Ioniq 5 has routinely found itself on our best electric car lists, serving as a close rival to the Renault Scenic and Skoda Enyaq. Its boxy shape translates to masses of interior space, plus Hyundai’s cabin tech is some of the most intuitive on the market, making it a very easy EV to live with.

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While we think the Scenic and Enyaq are the better EVs overall, there are still some good reasons to pick the Ioniq 5. You may already have been won over by its retro-futuristic looks, which look as fresh today as they did when it launched. Most important for EV buyers, though, is the Ioniq 5’s range. While the base car only gets a 63kWh battery with 272 miles of range, that’s still more than both the entry-level Scenic and Enyaq. You get a heat pump as standard, too, so that figure should be achievable year-round, in theory.

ProsCons
  • Stylish
  • Ultra-fast charging
  • Practical
  • Slightly fidgety ride
  • Can get expensive
  • Shallow boot

Find the latest new and used Hyundai Ioniq 5 deals on our sister site Auto

Tesla Model 3 review - one car to rule them all?

Tesla Model 3 front quarter driving
Carbuyer rating

4.4 out of 5

Read full review
  • Priced from around £40,000
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The most affordable Tesla you can buy today comes in at £39,990, allowing you to duck under the luxury car surcharge with £10 left in your pocket. The cheapest Tesla is pretty much all you need, anyway – the Model 3 Rear-Wheel Drive is an excellent all-rounder that can cover up to 318 miles of range on a charge while packing impressive tech and nippy performance.

There are a handful of quirks to get used to with the Model 3, however. Not everyone will be a fan of the minimalist interior, which was simplified even further following its mid-life update in 2023. The central touchscreen is used for essentially everything, including your speed read-out and even selecting drive, reverse and park. Tesla has also removed the indicator stalk, replacing it with a pair of buttons on the steering wheel. This seems like a step backwards in our view, but if you can get used to its idiosyncrasies, the Model 3 is a brilliant electric car for the money.

ProsCons
  • Excellent range
  • Advanced features
  • Competitive pricing
  • Very minimalist design
  • Frustrating controls
  • Small boot aperture

Find the latest new and used Tesla Model 3 deals on our sister site Auto

Skoda Elroq review – a great-value compact electric SUV

Skoda Elroq
Carbuyer rating

4.4 out of 5

Read full review
  • Priced from around £32,000
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If you’re willing to sacrifice a little boot space, then the new Skoda Elroq could be one of the best-value electric cars around. Think of it as a Skoda Enyaq with a bit chopped off the back – you get the same cabin up front, a similar driving experience and near-identical looks, but it costs thousands less. The entry-level model costs just under £32,000, but its 52kWh battery is on the smaller side. It’s still rated for up to 232 miles of range, but we’d recommend upgrading to one of the bigger batteries if you plan to drive on the motorway regularly.

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Fortunately, both the 59kWh and 77Wh Enyaq models are available from under £40,000, meaning you can avoid the Expensive Car Supplement no matter which one you pick. The Enyaq SE L 60 with the 59kWh battery will be a happy medium for many buyers, as it comes with more kit than the standard car and a marginally longer range for not much extra cash. The Edition 85 model with the 77kWh battery is the most impressive on paper – you get a much more serious 360-mile range and lots of neat features, including adaptive cruise control and keyless-entry.

ProsCons
  • Very comfortable
  • Spacious interior
  • Lots of practical features
  • Base model’s range could be better
  • No physical climate controls
  • Dull to drive

Find the latest new and used Skoda Elroq deals on our sister site Auto

Volkswagen ID.3 review - solid EV, but infotainment lets it down

Volkswagen ID.3 facelift UK
Carbuyer rating

4.4 out of 5

Read full reviewWatch video
  • Priced from around £31,000
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It’s not often that new cars decrease in price the longer they remain on sale, but that’s not the case for the Volkswagen ID.3. A new, cheaper battery option was introduced in late 2024, dropping its starting price to just over £30,000 and making it a far more attractive electric car proposition. While that’s still a lot more than cars like the Citroen e-C3, the ID.3 is a more substantial family car, with more space, more kit and more range.

Even the new entry-level ID.3 ‘Pure’ can cover up to 241 miles of range. It’s this model that offers the best value in the range, but the ‘Pure Match’ model isn’t all that much more expensive and gets a few extra features. In fact, all but that range-topping ID.3 GTX fall under the £40,000 limit, though we’d avoid the £39,000 ‘Pro S’ models unless you really plan to make use of the 346-mile range – it’s a lot of money for a hatchback. The ID.3’s fiddly infotainment system is still a sticking point, but big improvements were made following an update in 2024.

ProsCons
  • Performance
  • Range and fast charging
  • Interior space
  • Infotainment tech not up to scratch
  • No one-pedal driving
  • Top-spec cars four-seat only

Find the latest new and used Volkswagen ID.3 deals on our sister site Auto

MG4 review – a great-value electric hatchback

MG4 front quarter driving
Carbuyer rating

4.3 out of 5

Read full reviewWatch video
  • Priced from around £27,000
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The MG4 was something of a milestone EV when it arrived in the UK in 2022. It lowered the barrier to entry to the electric family car market significantly, undercutting cars like the Volkswagen ID.3 while still offering a competitive range and plenty of equipment. Fast forward to today, and the MG4 still holds its own, offering space for the whole family while delivering low running costs and a fun driving experience.

Go for the £27,000 MG4 SE, and you’ll have an excellent urban hatch. Its 218 mile range might be a bit limiting for some, but upgrading to the ‘Long Range’ model brings a much more usable 280-mile figure. This model still comes in at under £30,000, which is excellent value in our book. But what if you’re more concerned about performance than range? Well, MG will sell you the MG4 XPower, which handily falls well below the £40,000 mark. With 429bhp, it’s the quickest car on this list by some margin, and is one of the best-value performance cars on sale – even if its 239-mile range is a bit mediocre.

ProsCons
  • Affordable pricing
  • Competitive range and charging speeds
  • Modern design and tech
  • Some cheap-feeling trim
  • Average-sized boot
  • Wind and road noise

Find the latest new and used MG4 deals on our sister site Auto

Best electric cars under £40,000 price and score list

Use the table below to compare the starting prices and Carbuyer scores for each of the 10 electric cars on this list.

Best electric car under £40,000 rankingMake and modelPriced fromCarbuyer rating (out of 5)
1Renault Scenic£37,0004.4
2Citroen e-C3£22,0004.2
3Skoda Enyaq£39,0004.5
4Hyundai Kona Electric£35,0004.5
5Kia EV3£33,0004.5
6Hyundai Ioniq 5£40,0004.5
7Tesla Model 3£40,0004.4
8Skoda Elroq£31,000

4.4

 

9Volkswagen ID.3£31,0004.4
10MG4£27,0004.3
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